Code of Ethics Case Studies

Case #13-1: Preparation of Instrument Unrelated to Real Estate Transaction

Client A dropped in to see his friend, REALTOR® B, who had recently provided professional services to Client A's company. Client A said that his company was sending him on business to the Far East; that the trip would involve a good deal of air travel in remote areas; and that he would like to leave a power of attorney with his wife while he was gone "just in case." He asked REALTOR® B if he would prepare a power of attorney for him and REALTOR® B said, "It's a simple document. I'll be glad to prepare one for you," and did.

This action came to the attention of the Grievance Committee of the Board of REALTORS® , which, after review, filed a complaint with the Board's Professional Standards Committee, charging REALTOR® B with a violation of Article 13 of the Code of Ethics.

REALTOR® B's defense was that he understood Client A's request to be essentially for a real estate service since from his general knowledge of Client A's personal affairs, he knew that Client A could have no reason for giving his wife a power of attorney except to put her in a position to act in a real estate transaction. He contended that because his preparation of a legal document was directly related to real estate matters, he had rendered real estate, not legal, service to Client A.

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